Category Archives: Economic development

Yunnan’s Dulong minority isolated no more

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Recently, the Ethnic Dulong Survey Team conducted a week of anthropological observation and interview research based around the remote village of Dizhengdang (迪政当村). Under the leadership of Professor Gao Zhiying (高志英), an expert on ethnic Dulong culture and society, the 21 team members spent three days heading from Kunming to one of Yunnan’s most remote river valleys.

The survey team from Yunnan University found state-funded housing and road projects are transforming the culture of the Dulong people (独龙族), who have for centuries inhabited theDulong River area largely undisturbed. Now, with the opening of a tunnel and road in 2014, their traditional way of life has been changed and sometimes disrupted by a permanent link to the outside world.

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A bit of background

The town of Kongdang (孔当) sits on a plot of flat land by the Dulong River, and is also a stop on the Dulong River Road, which begins in Gongshan (贡山县). Dizhengdang is 42 kilometers further north of Kongdang and currently inhabited by 592 villagers comprising 158 households.

The narrow Dulong river valley is formed by an upstream tributary of the Irrawaddy River, which runs primarily through Yunnan before reaching Myanmar. Its course cuts across the Gaoligong Mountain Nature Reserve. Seventy percent of the entire Dulong population — roughly 4,000 people — call this area home. A long history of isolation and poverty has for decades made the Dulong targets of socio-economic aid and government-funded ‘reforms’.

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The first of these began in 1964, with the establishment of the 65-kilometer People and Horse Track (人马驿道). This footpath was built largely by the People’s Liberation Army and opened a new avenue for the supply of everyday goods to inhabitants of the Dulong valley. The seven-day hike to Gongshan was cut to four, making the transport of commodities in both directions less cumbersome. A state-operated mule caravan later shuttled vital supplies such as grain and clothing back and forth over the mountains as well, ending the need for military parachute drops of supplies that preceded the path. In 1999, a 96-kilometer road from Gongshan to the Dulong River saw its first traffic, officially ‘opening up the last minority area in China‘.

Fifteen years later, a seven-kilometer tunnel opened along the Dulong River Road, reducing travel times further and making villages once unreachable during the winter months accessible year-round. Other branch roads are planned or under construction to even more distant hamlets. These include Dibuli (迪布里), Nandai (南代), and Xiongdang (雄当) near the Tibetan border — which are still only accessible by dirt paths, tiny suspension bridges and Yunnan’squickly disappearing ziplines.

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Anthropological observations

Traditionally, the Dulong practiced subsistence slash-and-burn agriculture while cultivating corn, millet, buckwheat, taro and several varieties of beans. However, the Chinese government has, since 2003, subsidized many villages with cash and handouts of rice in efforts to conserve forested hillsides. This has had multiple and often contradictory consequences. In addition to hunting and fishing, the joint cultivation of traditional agriculture is a core element of Dulong culture, relating not just to native ecological knowledge, but also to religion and social organization.

Thus, the implementation of grain and cash handouts has increased the Dulong people’s dependency on state subsidies, decreased overall agro-biodiversity, and threatened to make endemic bio-cultural knowledge a thing of the past. The extra time saved from less farm work also leaves room for some villagers to seek out timber and herbs in the mountains, which, while increasing incomes, also results in unintended natural resource depletion and a new form of deforestation.

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Between 2010 and 2014, the provincial government invested a further 1.3 billion yuan (US$203 million) in “improved housing, infrastructure, social development and environmental protection”. This included the building of several modern housing clusters not necessarily located near where their proposed inhabitants traditionally call home.

For example, the research team from Yunnan University observed in Dizhengdang that each household has its own house built by the state. However, the choice of the new village site only took into consideration road accessibility. The new compounds are convenient for villagers living nearby but for those living scattered in the mountains beyond road networks, a move to a new home without arable lands is problematic.

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Among the 40 households in the northernmost hamlets of Xianghong and Nandai, not one them have moved to the new compounds in Xiongdang and Dizhengdang. When asked why they had not taken advantage of government housing, many replied “We don’t have farmland nearby the new villages, and the elderly also prefer to stay in the places where they grew up”. All villagers interviewed expressed satisfaction and gratitude for government subsidy policies, but considering the high cost of daily supplies transported to this remote valley, most Dulong people still have to work very hard in the fields to lead modest lives.

Another major factor soon to affect Dulong culture is the expected inundation of tourists hungry for the opportunity to see an ethnicity most famous for tattooing the faces of its women. While this practice is no longer common, many of the older female residents do still bear the marks of this tradition.

During the researchers’ one-week canvas of the area, the fledgling tourist industry was apparent, with visitors from Kunming and Shenzhen being the most prevalent. Due to the policies listed above — as well as the opening of a permanent road — the Dulong people are undergoing radical changes to their society and culture. How they adjust to the rapid encroachment of the outside world remains an open question.

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This article written by Sun Fei was first published on 8/25 here on the GoKunming website. 

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Filed under Agriculture, China, Culture, Current Events, Economic development, ethnic policy, SLIDER, Yunnan Province

Gold Diggers

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A major Geographical investigation looks at the devastating environmental and debilitating health effects a Thai gold mine is having on a village in Loei, and at how a group of determined villagers are fighting back

 

It’s a truly idyllic valley, thumbs of karst rising from rice fields, a glowing sunset tempered by cumulo nimbus. Women bend at the waist planting rice seedlings, their movements reflected in the water. The set for a painter or poet.

Instead it’s the stage for the violent suppression of popular protests in the northern Thai province of Loei. For eight years, the embattled villagers have been fighting the owners of an adjacent gold mine. This lovely valley and the determined villagers are at the intersection of human, physical and political geography writ small and very mean.

To the villagers, the environment itself has become the enemy. The water in which the women stand plunging seedlings into mud is contaminated with arsenic, manganese and chromium. Below the overburden dumps, the rice fields hold arsenic, cyanide, mercury and cadmium.

Under trees, an unusual number of people sit in wheelchairs. Changma, 65, suffering debilitating peripheral neuropathy in her legs and hands (‘stocking/glove syndrome’) sits in her basic kitchen, cleaning pots. She is barely able to walk. Her doctor diagnosed the cumulative effects of arsenic. Cham, 84, who lives 300 metres away, has worse symptoms. A bowl of water nearby soothes the pain and persistent tingling associated with damaged nerves. Her 86-year-old husband with degenerative spinal condition is unable to care for her. We see cases of skin rashes. All signs of chronic arsenic poisoning.

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Filed under Agriculture, Current Events, Economic development, SLIDER, Sustainability and Resource Management, Thailand

World’s largest solar maker invests in Yunnan

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Solar power is shining a renewed spotlight on Yunnan. Last week, Trina Solar announced an agreement with Yunnan Electric Power Design Institute to supply solar cells capable of producing 51 megawatts of electricity. These panels will be the first installment of a larger plan to populate some tea-growing areas in Xishuangbanna with photovoltaic generators.

The proposed solar farm will eventually reach a capacity of 100 megawatts (MW), enough to power roughly 36,000 homes annually. Despite its tremendous size, all of the electricity has been reserved exclusively for large tea plantations within the prefecture. The power will be utilized to run well-water pumps and irrigation systems already in place within the farms.

The Yunnan Electric Power Design Institute (YEPDI), according to an industry press release, will supply “engineering, procurement and construction services for the project”. Representatives from both companies expressed hope the collaboration will revolutionize renewable energy projects in the region. Chang Jichun, deputy manger of YEDPI, congratulated Trina Solar as “an industry leader with a vision to build a greener world…[building] a pioneer project in China to put solar power to work on the tea plantations.” As a result of the endeavor, Chang continued, Yunnan’s “tea plantations can be more efficient with increas[ed] self-reliance and less pollution.”

In the first stage of the multi-pronged project, Trina Solar will deliver approximately 43,000 TSM-255 modules and 154,000 TSM-260 versions. Extremely durable and designed to withstand exposure to pesticides and herbicides, the glass panels represent only half of the solar farm’s eventual size. With each panel measuring one meter by 1.65 meters, the 190,000 panels eventually covering the farm will take up an area of 660,000 square meters.

Put in perspective, that corresponds to 120 American football fields worth of solar modules placed side-by-side — a sea of glittering black. Each TSM-260 panel comes with a 25-year performance guarantee. Tea farmers in the area are thus assured a long-term source of renewable electricity, with each panel replaceable and upgradeable. Already underway, shipments and installation are expected to be completed by the third quarter of 2015.

Trina Solar has proved itself the most lucrative and successful businesses of its kind, often promising shareholders five percent returns on investment. Founded in 1997, Trina Solar today operates mostly in Africa, China and North America and explosive demand for solar energy has allowed the company to grow exponentially since its founding. Last year, the company sold solar panels able to generate 3.66 gigawatts of electricity. With such success, Trina Solar may well push further into the Yunnan market as the BBC reports Beijing has pledged to introduce programs to significantly expand the nation’s solar and wind power industries.

Yunnan province is already home to some of the largest photovoltaic power stations in Asia. Just 70 kilometers southeast of Kunming on the outskirts of the Stone Forest, a 166 MW solar farmis expected to complete construction this year. Once fully underway, the project will generate 188 million kilowatts of energy per hour, eliminating 175,000 tons of carbon dioxide emissions each year. The 9.1 billion yuan (US$1.45billion) project is just one of many reasons Kunming carries the unofficial title of China’s ‘Solar City‘.

Outside of Yunnan, massive endeavors throughout China are underway to reinforce the importance of wind and solar energy while tackling the country’s crippling pollution issues. Although often overlooked, China already leads the world in terms of renewable electricity production, currently spending more than US$80 billion annually on enhancing its green energy sector — funding which has facilitated a 100-fold increase in the country’s use of solar cells since 2005.

This article written by Richard Diehl Martinez, was originally published here on the Gokunming.com website.

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Filed under China, Current Events, Economic development, Energy, Environment and sustainability, Sustainability and Resource Management, Yunnan Province

Kunming’s China-South Asia Expo Balloons to Enormous Proportions

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When the Spring City throws a trade and investment party, everyone comes. That is the lesson gleaned following closing ceremonies held yesterday at the twenty-third annual Kunming Import and Export Commodities Fair and third annual China-South Asia Expo. Expected to generate billions in business agreements and attract hundreds of thousands of curious attendees, the twin events did not disappoint.

The expos are held each year with the intention of attracting greater foreign business interest and interaction with Yunnan-based companies. This principal goal is part of a larger strategy to build up the province’s economy while also increasing China’s political and commercial footprint in Southeast Asia and beyond.

In terms of sheer numbers, these goals are being realized. Contracts signed during the course of the fairs totaled 785 billion yuan (US$127 billion) in direct foreign investment — a catchall term including money put toward virtually any business acquisition or other commitment. At last year’s expo opening ceremony, Chinese Vice Premier Wang Yang (汪洋) said he expected the next few years to be “the most active and fruitful period yet” for cooperation between Yunnan, Association of Southeast Asian Nations member-countries and South Asia. He appears to have been correct.

The numbers for direct foreign investment in Yunnan dwarfed those concerned with Chinese ventures in other countries, which reached 155 billion yuan (US$25 billion). In total, 903 overseas firms inked deals to begin or expand existing businesses in the province. The largest of these involved the fields of tourism, energy and infrastructure development, logistics, education, and environmental protection.

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Highlighting Yunnan’s growing importance as a trade and investment hub, 20,000 businesspeople as well as dignitaries from 31 countries attended. Among the most notable were Chinese Vice President Li Yuanchao (李源潮), the president of the Maldives, Laos’ prime minister and high-ranking representatives from Bangladesh, Cambodia, India, Myanmar, Thailand and Vietnam.

India’s Minister of State External Affairs, VK Singh, also attended. He represented the expo’s feature country, a place of honor this year replete with a dedicated “museum” devoted not only to the Subcontinent’s most advanced industries, but also its history and culture. At a separate event held during the expo, Singh officially opened China’s first yoga college at the Yunnan University of Nationalities campus in Chenggong.

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Giving India such recognition was no random decision, but instead a calculated diplomatic move aimed at encouraging the world’s second most populous country to embrace China’s Belt and Road Initiative. The brainchild of President Xi Jinping, the proposal looks to propel regional integration between China and the countries of Central and South Asia, India chief among them.

While enormous deals and industry-specific conferences were carried out behind closed doors, the general public tuned out in droves to this year’s expos. In preparation, organizers printed half a million tickets. It did not prove to be enough, as 740,000 attendees passed through the gates at the Kunming Dianchi International Convention and Exhibition Center, shattering last year’s attendance numbers by 500,000.

An exhibitor from Taiwan, surnamed Li, told reporters she had signed deals to sell dried fish to Carrefour, Parkson and Golden Eagle while at the expo. She, like many other exhibitors, ran out of things to sell two days before the expo concluded. “Everyone has been so friendly and warm,” Li said, “I hope to see them all again next year.”

This article, written by Patrick Scally with images by Yereth Jansen, was first posted here on Gokunming.com.

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Filed under China, Current Events, Economic development, Foreign policy, GMS, SLIDER, Yunnan Province

Bright City Lights: Urban Trends and Futures in Southeast Asia

Traffic congestion in Bangkok

Traffic congestion in Bangkok

This year, Jakarta earned the unsavory title of “World’s Worst Gridlock.” The city of 23 million is now reputed for having to most congested streets in the world. Another Indonesian city, Surabaya, took the number four spot. If you continue down the rankings to number eight, you will find yet another Southeast Asian metropolis – Bangkok.

The tendency for gridlock in these cities is more than a daily inconvenience for residents. These levels of traffic congestion are indicators of a trend in the wider Southeast Asian region. In this part of the world, urban populations are growing faster than municipal and national governments can handle.  When managed sustainably, cities can be a valuable vehicle for economic development and socio-demographic transition. For example, cities can facilitate productive trans-border connections and slow birthrates, which enables more women to enter the workforce. Nevertheless, urbanization is a double-edged sword.

Rapid, unplanned growth results in unsustainable development that threatens social, economic, and environmental stability.  In a landmark report that analyzes 10 years of urbanization data from East Asia, the World Bank suggests that urbanization in East and Southeast Asia will have “long-lasting effects on the region’s social, economic, and environmental future.” Understanding the growth trends in Southeast Asia will boost the region’s ability to avoid the pitfalls associated with the rapid type of urbanization that has been observed over the past decade.  In other words, the region needs to pay attention to these changes if they don’t want to spend the rest of their down time stuck in traffic.

Dominant Urbanization Trends

Between 1990 and 2010, Southeast Asia increased its urban population by at least 12%, per United Nations estimates. The fact that Asian cities are growing is not a fresh realization, but few observers of these phenomena have questioned how these cities are growing, instead of just how big.

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For example, in the past 10 years, East Asia has experienced more urban growth in small- and mid-sized cities than in major metropolitan areas. This has several more nuanced implications for the region. Successful development in smaller metropolitan areas could relieve much of the pressure put on high-population areas. For example, a Thai development strategy used tax breaks to encourage people to take up residence in the regions outside of Bangkok . Unfortunately, the government failed to provide infrastructure and facilities to support business development in outlying regions. Bangkok remained the prime area for investment, and the program floundered.

Megacities like Bangkok often gain international reputations that afford them opportunities to advertise for foreign direct investment.Small and mid-sized cities, on the other hand, have to fight for attention and funding from national governments and lack the resources necessary to advertise to a wider range of investors. Take the case of Ho Chi Minh City and Da Nang, two metro areas in Vietnam. Ho Chi Minh City is the country’s largest city and Da Nang was only about an eighth of HCMC’s size in 2011. However, the rate of urban population change in Da Nang was 4.5% as of 2010 and HCMC was 3.9%. While this may appear to be a narrow margin between two cities, imagine the national impact when every mid-sized city in a country grows at this rate. The need for infrastructure would surely outpace the investment available to these smaller metropolitan areas.

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In addition to major growth in small- and mid-sized cities, the fastest growth of urban population was experienced in East Asia’s low- and middle-income countries, namely Laos, Cambodia, and Vietnam. Japan, South Korea, and even Thailand place far behind these countries in their rates of urban land and urban population increase.

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The less developed countries in the region face administrative and financial challenges on a national level, which creates an environment where a single city in the country, often times the capital city, experiences the majority of the urbanization. The massive, resource-hogging cities that result are known as “primate cities” in the vernacular of urban studies scholars. Concentrating an entire country’s political, cultural, and economic capital in one area creates national vulnerability if there is a crisis in that single city.

Urban primacy is especially detrimental for a country when there is massive migration to the core and a development lag in the country’s periphery. This phenomenon plays out the same way in developing countries across the globe: Rural poor migrate to urban areas in search of better economic opportunities, but financially and administratively inept governments cannot provide migrants with adequate resources for finding jobs and homes. Densely populated and amenity-poor settlements result as migrants join the informal economy of the city.

Bangkok, Yangon, Phnom Penh, Vientiane, Jakarta, Manila, and Kuala Lumpur have all reached primacy within their respective countries. As previously mentioned, Bangkok is one city that has acknowledged its primate city status and attempted to reduce its dominance of Thailand’s geography. Countries such as Cambodia and Myanmar will also need to take steps to ensure that Phnom Penh and Yangon do not morph into unsustainable networks of unplanned settlements. The challenge lies in the fact that countries like Cambodia and Myanmar lack the administrative and financial capacity to shift rural to urban migration trends. However, it is promising that smaller cities in the region are doing most of the growth, even if they have a long way to go before they can compete with these metro areas.

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Finally, Southeast Asia’s urban populations are growing faster than the region’s urban land. At present, the main reason for dense urban growth in the region can be attributed to the lack infrastructure available on the periphery – a far cry from the smart growth policies that many cities implement to promote compact growth. Even so, high-density urban growth is associated with many positive outcomes when it is effectively provided for. Namely, high-density development tends to have fewer negative environmental consequences than urban sprawl. Kuala Lumpur is actually an exception to this trend in Southeast Asia, and has been criticized for failing to compact its urban growth. A heavy reliance on automobiles has been detrimental to the city, but other emerging urban areas in the region have the chance to get ahead of the car craze and promote smart growth that emphasizes efficient land use and practical transportation.

By and large, dense urban growth still has a number of caveats. As mentioned, the reason density in the region is high is due to a lack of amenities outside of core cities. If population growth outpaces the ability of the core to provide services, the quality of life in many cities will quickly degrade. Overcrowding is also a serious challenge that many cities in the developing world are faced with, and Southeast Asia is no exception. Comprehensive urban planning will be necessary to prevent overcrowding from becoming another major trend in the region.

Urban Planning and Governance: Missing Links

When you combine all of the formulas for urban growth in Southeast Asia, the results are two-sided: There is potential for inclusive, sustainable urban areas, but there is also a chance for the region to mushroom into a clutter of poorly planned development. When planning is neglected, poverty, environmental degradation, and land use conflicts ensure. For Southeast Asian cities to avoid falling victim to, say, the level of air quality degradation that many Chinese cities now face, spatial planning and good governance are crucial.

A 2009 assessment of urban governance prepared for UN Habitat is grim: the report asserts that the capacity of both local and national governments in the region is fragmented and weak, with a serious lack of simple management skills and adequate budgeting for necessary infrastructure. “Good” urban governance requires transparency, political will, and funding, but many Southeast Asian governments underperform in all three categories. There is always a propensity for countries to urbanize, regardless of political stability. With that being said, Southeast Asia’s urbanization trends alone illustrate that not all growth is good growth. A solid political environment at least ensures that there is a structure for discussing urban needs when they arise, although definitive actions need to be taken if there is going to be any change.

Administrative fragmentation is another burgeoning obstacle for Southeast Asian boomtowns. This term refers to the spillover of growth from one municipality into neighboring jurisdictions. One example is Manila’s urban area, which spans 85 municipalities and seven provinces. The World Bank predicts that many of the growing small- and medium-sized cities will soon experience this type of administrative challenge, if they are not experiencing it already.  Different jurisdictions often struggle to coordinate plans for infrastructure development and management, leaving many areas underserved.

The ecosystems impact of such trans-boundary urban areas is also notable because rivers, lakes, and forests require cooperative management.  Overcoming administrative fragmentation appears daunting in a region where political stability is scarce, but regional planning associations have proved to be an effective way to manage fragmented urban areas. The Metro Manila Development Authority (MMDA) is one such organization tasked with monitoring urban development, but it struggles with a low budget and limited regulatory power. Even so, the future of many urban agglomerations in the region would look brighter if such organizations were widely utilized. Urban management organizations have the ability to pull multiple institutional actors together when questions arise about different stakeholders’ opinions.

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Urban Futures

Southeast Asia’s urban population has not yet reached 50% of total population, an indicator that more urban growth is still to come. The future of the region’s urban areas will in part be dictated by the trends that have been observed in the past decade, but also by events that remain to be seen. Climate change is one of the foremost worries in the region, but political stability and economic productivity will also play roles in the ability of the region’s cities to develop sustainably. Metropolitan areas in the region need to get ahead of urban growth and expansion in order to take some of the uncertainty out of the future.

Climatology experts maintain that no part of the world will remain unaffected by climate change, but Southeast Asia is actually a particularly high-risk area. A number of Southeast Asia’s urban centers falter in climate change scenarios that involve sea level rise, drought, saltwater intrusion, and severe weather events, and famine. As metropolitan areas in the region continue to develop, resilience is a topic that needs to be kept in mind. Cities like Bangkok and Ho Chi Minh need to have planes in place for flooding and typhoon events. Manila needs to ask itself how to feed a metropolitan area of 16 million if crop productivity plummets due to droughts or heat waves.

Besides the need for climate change adaptation measures, Southeast Asia also represents a large market for mitigation efforts. By reducing dependency on cars and carbon-based energy sources, the region can bypass being a part of the carbon problem. China and the West used coal to fuel their urban expansion, but Southeast Asia has the opportunity to exclude GHG heavy industries and develop using environmentally sound technologies. As new attempts at international climate treaties are rolled out, it will be interesting to see where many Southeast Asian nations fall on the spectrum of mitigation requirements.

Historically, developing countries have been held to lower emission reduction standards than countries in the developed world, but countries like Malaysia and Thailand have potentially reached a threshold where they will be counted among the world’s more developed countries, and thus required to reduced their emissions further. In any case, climate mitigation is good for Southeast Asia if it means that the impacts of climate change on the region will be softer than current predictions.

Political stability is also a recurring obstacle for a number of Southeast Asian countries. Years of stability and growth have been punctuated by sudden regime changes that have reduced the level of confidence both Southeast Asian nationals and outsiders have in the region’s governance. Urban planning is an intensely political process, so the status of a country’s national government directly effects urban development. If establishing effective national governments proves to be too much of a challenge for parts of the region, how can we expect urban management to get the attention that it requires?  Metropolitan development authorities and NGOs could potentially help cities weather the storm if political institutions fail, but finding consistent, effective governance is critical for the future of Southeast Asia’s cities.

Future economic development in Southeast Asia will also continue to shape urban areas in the region. Low-cost manufacturing has played a significant role in growing many of the region’s largest cities, but that may change as smaller urban areas take up lower-technology manufacturing as well. Some suggest that economic outcomes are better in regions where the largest cities take on service industries and high-tech manufacturing and the smaller cities concentrate low-tech industries. However, this is impossible if the infrastructure needs of smaller cities remain unmet. Investment in Southeast Asia’s small- and mid- sized cities is an important step that the region can take to move towards greater economic output.

Urbanization in Southeast Asia has reached a clear bottom line: In order to reap the benefits of healthy, innovative urban areas, the region needs to raise its expectations for planning and governance. If current regional urbanization trends continue to play out, there is potential for Southeast Asia to be the home of several highly productive urban areas. Investing in small and mid-sized cities will create robust national economies and capitalizing on dense growth will keep the environmental impact of cities to a minimum. However, if planning and coordination are left on the wayside, the region will be set on a course for vulnerability to any sort of crisis that should arise.

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Filed under ASEAN, Cambodia, China, Current Events, Economic development, Environment and sustainability, Governance, Indonesia, Laos, Malaysia, Myanmar/Burma, Philippines, Sustainability and Resource Management, Thailand, Vietnam

Southeast Asia’s Illicit Wildlife Trade: International Cooperation Necessary to Find Solution

On Wednesday March 25, immigration authorities confiscated 492 black spotted terrapin pond tortoises at the Tiruchirappalli International Airport in India. Identified as merely carriers, the five passengers with tortoise-laden luggage seemed unaware of their baggage contents and were merely promised 10,000 Rupees each for transportation, a sum of about $800 USD. Bound for Bangkok, this shipment of tortoises represents the largest attempted volume of wildlife trafficking at the Trichy Airport and highlights the trans-boundary nature of the illegal wildlife trade in Southeast Asia.

Preceded only by the arms and drug trade, illegal wildlife trafficking represents the third- largest illicit trade in the world. As a region, Southeast Asia remains among the most critical in terms of severity and volume of wildlife trafficking. According to the United Nations Office on Drugs and Crime 2013 Threat Assessment, China represents the leading consumer country in the East Asia and Pacific region, with consumption levels in South Korea and Japan on the rise. Driven by high demand in East Asia for animal products in the form of food, traditional medicine, and decoration, the illegal wildlife trade in Southeast Asia is responsible for approximately 25% of the global industry, according to estimates made in 2005. Facilitated by expanding transportation infrastructure in Southeast Asia and the region’s porous international borders, the trans-boundary wildlife trade presents numerous governance challenges to the region’s developing nations. Not only does the illegal wildlife trade threaten Southeast Asia’s ecosystem biodiversity, but the industry also impedes economic growth and regional security because of its ties to drug trafficking and terrorism. While the role of each country within Southeast Asia is different regarding the illicit trade of live animals and their parts, the countries of the region must work together in order to develop viable governance solutions for the issue.

Facing the challenges presented by the illicit wildlife trade in Southeast Asia requires international cooperation, within the East Asia and Pacific region as well as globally. Ratified in 1975, the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES) was among the first international efforts to mitigate the illegal wildlife trade. CITES establishes lists of species, the trade of which is illegal without proper documentation, and requires that its member parties regulate the trade of these species through national legislation.  Currently, CITES has 180 member parties, including all of the countries in Southeast Asia, China, and the United States. However, CITES merely provides a framework for enforcement and requires country cooperation to effectively reduce illegal wildlife trafficking.  Although putting an end to the illegal wildlife trade in Southeast Asia remains an ambitious task, the efforts of CITES and ASEAN Wildlife Enforcement Network (WEN) have generated legislative headway in the region. Recent collaboration between China, the United States, and the member states of ASEAN suggests that wildlife trafficking is a dilemma that, just as the trade itself, transcends national boundaries.

Overview of the Illegal Wildlife Trade in Southeast Asia

Before introducing the various cooperation efforts in Southeast Asia aimed at combatting the illegal wildlife trade, we must first have an understanding of the unique set of ecological, economic, and security challenges that the industry presents to the region. Globally, Southeast Asia represents a hotspot for the illegal wildlife trade. Figure 1 presents data collected via a real-time, online surveillance system designed to track reports of illegal wildlife trade worldwide. Although these data do not reflect every instance of illegal wildlife trafficking, they provide a good base for comparing the trade between different regions.

According to the numbers I collected from the system on April 7, 2015, reports of illegal wildlife trade in Southeast Asia vastly outnumber every other region in the world. Because the region also contains numerous biodiversity hotspots, the illegal wildlife trade in Southeast Asia threatens some of the most ecologically productive ecosystems on earth. Inextricably tied to economic development, sustainable agriculture practices, and natural resource bases, maintaining ecosystem services remains of utmost importance to developing nations. The United Nations Environmental Crisis Assessment agrees, stating, “Healthy ecosystems provide the platform upon which future food production and economies are ultimately based.” As the single largest threat to vertebrate species extinction in Southeast Asia, the illegal wildlife trade undoubtedly threatens ecosystem health as well as economic development within the region.

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Black market value of commonly-traded wildlife products in Asia-Pacific region. Measured in USD. Figure 1: Information gathered on April 7, 2015 from http://www.healthmap.org/wildlifetrade

 

The Southeast Asian illegal wildlife trade represents a lucrative business. Figure 2 shows maximum market value data for various commonly traded illegal animal parts, information collected by the U.S. Congressional Research Service in 2008. Currently, a kilogram of rhino horn is approximately worth as much as a kilogram of gold in Vietnam. In terms of the monetary value of the wildlife trade worldwide and regionally in Southeast Asia, the illicit nature of the industry prevents researchers from making completely accurate estimations. However, the UNODC suggests that the illegal wildlife trade in in the East Asia and Pacific region is, conservatively, worth around 2.5 billion USD annually, while a Brookings Institute report suggests that the value for Southeast Asia alone is closer to 8-10 billion USD.

The magnitude of and range between these values demonstrates that the illegal wildlife trade in Southeast Asia represents a substantial economic problem, the scale of which is largely uncertain, due to a lack of regulation and research. The economic threats posed by the illegal wildlife trade range from a potential decrease in eco-tourism due to species loss to large-scale development impediment as the trade perpetuates a cycle of poverty within Southeast Asia’s rural regions. For example, the vast majority of those who illegally harvest wildlife in the East Asia and Pacific region happen to be rural individuals seeking to boost their low income levels. Therefore, as an enterprise born out of desperation and the lack of financial resources, the illegal wildlife trade, particularly the specialized traders at the top of the industry, benefits immensely from keeping rural individuals poor. Thus, the continuation of the illegal wildlife trade in Southeast Asia does not bode well for the region’s economic future.

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Figure 2: Information from U.S. Congressional Research Service on maximum market prices for commonly-traded animal products worldwide

 

Illegal wildlife trafficking also carries significant national security implications. In Africa, for example, ties between poaching and terrorist groups have proved particularly alarming. Although less is known regarding the connection between wildlife trafficking and other criminal organizations in Southeast Asia, the region’s illegal wildlife industry maintains strong ties with poaching throughout Africa. While this tie does not necessarily suggest that wildlife trafficking in Southeast Asia is directly connected to African terrorists groups, the connection can generate security threats in the form of government corruption.

Vietnamese demand for rhino horn for use in traditional medicine spurred a sharp increase in rhino poaching in South Africa during 2013. The World Wildlife Fund recognizes government-level corruption as a contributing factor to the trade of rhino horn in the country, as officials allow free passage to select individuals transporting rhino horn. Not only does corruption in the illegal wildlife trafficking industry hinder enforcement efforts, but it also leads to political instability, as the national government loses the respect of its citizens as well as other nations.

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On a similar note, Vietnam’s ties with rhino poaching in South Africa demonstrate that Southeast Asia plays a diverse set of roles in the global wildlife trade. Because the countries of Southeast Asia simultaneously serve as source, transit, and demand points for live wildlife and animal parts, tracking the origin of species traded in the region proves incredibly difficult. Similarly, the trade itself encompasses a complex set of actors. As a relatively low-risk, incredibly lucrative crime, wildlife trafficking presents an appealing option for impoverished individuals at the poaching and transportation levels as well as for experienced criminals at the highest level of the trade, hoping to supplement other illicit industries. Those responsible for the transactions are rarely caught and the transporters generally take the blame, as in the black spotted tortoise case at the Trichy Airport earlier this year. The inability to identify ringleaders within the industry perpetuates the illegal trade, as the individuals caught in the process (poor transporters and poachers) are easily replaceable. Fundamentally, the illegal wildlife trade exploits low levels of law enforcement prevalent in Southeast Asia’s developing countries, and thus undermines existing legal efforts aimed at reducing the trade.

CITES and Southeast Asia

The illegal wildlife trafficking situation in Southeast Asia is dire and benefits no one but those at the top of the trade. Nevertheless, international attention to Southeast Asia’s illegal wildlife trade has undoubtedly increased since CITES was first established. The timeline below shows the location history of the CITES Convention of the Parties (CoP). Occurring every two to three years, these conventions essentially assess the progress of member countries in terms of illegal wildlife trafficking enforcement. Held in Bangkok, the 2004 convention was the first CoP held in Southeast Asia.

In 2013, Bangkok again served as the convention host, becoming the only city to host two CITES CoP’s. CITES’s focus on Bangkok reflects international recognition that the illegal wildlife trade in Southeast Asia, specifically Thailand, is in desperate need of regulatory help. Last year, CITES issued a warning to Thailand, asserting that if the national government continued to let its ivory market go unregulated by March 2015, it would face wildlife trade sanctions. As of 2013, Thai laws permitted the trade of domesticated elephant ivory; however, due to a lack of market regulation, poached African elephant ivory could easily make its way into the market. There has been no word thus far as to whether Thailand met CITES demands by the March deadline.

Timeline

CITES is undoubtedly a useful international organization that provides information and baseline regulatory practices to its member countries; however, CITES framework must be implemented in national legislation and then carried out at major transportation centers in order to be effective. Refocusing on the recent wildlife trafficking case at the Trichy Airport, the black spotted tortoise (Geoclemys hamiltonii) falls under Appendix 1 of CITES, a list reserved for species threatened with extinction. While this listing did not deter those attempting to transport the tortoises to Bangkok, it did allow officials to halt this potential transaction and suggests that CITES protocol is being implemented, to some degree. Furthermore, a look at the CITES website news and highlights shows that ASEAN and China are making regulatory progress in the eyes of the international community regarding the illegal wildlife trade. For example, on March 11, “CITES commends leading Chinese courier companies’ zero tolerance towards illegal wildlife trade” was followed by an April 2 report titled “ASEAN member States discuss enhancing regional cooperation to combat poaching and illegal trade in wildlife.”

These positive reports regarding the illegal wildlife trade in the East Asia and Pacific region reflect CITES attention to and support of the region’s efforts. And CITES praise of China and ASEAN is not unwarranted. A group of courier companies thought to make up approximately 95% of China’s market agreed to a “Zero Tolerance” pledge with regard to the illegal wildlife trade at a World Wildlife Day symposium. The CITES website recognizes this action as a huge step because “courier service is being used as by far the most important means of transport…in the illegal trade chain.” On the ASEAN side of the equation, member states met from March 30 to April 1 of this year for a Regional Forum on Combatting Wildlife Trafficking. Held in Malaysia, the forum emphasized the importance of collaboration and cooperation in controlling the illegal wildlife crime that continues to plague the region. However, CITES openly recognizes that more work must be done on the part of national governments, listing China, Malaysia, the Philippines, Thailand, and Vietnam among eight countries of “primary concern.”

ASEAN-WEN’s Role in Halting Illegal Wildlife Trade

Although the process of ASEAN incorporation into CITES was gradual, all ASEAN countries were member parties by 2004. As CITES’ report suggests, recent cooperative strategies have been adopted to staunch the illegal flow of live animals and their parts throughout Southeast Asia, through the lens of ASEAN. Among these strategies include the formation of the ASEAN-WEN at the 2004 CITES CoP in Bangkok.

ASEAN_Integration

Number of ASEAN countries that were also member parties to CITES over the past four decades

 

Self-defined as “a regional intergovernmental law-enforcement network designed to combat the illegal wildlife trade,” ASEAN-WEN maintains connections with CITES, U.S. Fish and Wildlife Service, and U.S. Department of Justice. The inclusion of two U.S. federal entities signifies a strong link between the efforts of ASEAN-WEN and the United States. Member states of ASEAN, despite the organization’s strong tendencies towards non-interference, seem to welcome U.S. input with regard to the region’s fight to stop the illegal wildlife trade.

Earlier this year, the Obama administration designed a plan to track and target wildlife traffickers worldwide using American intelligence agencies. President Obama has recognized that the ivory and rhino horn markets in Asia have grown tremendously and the problem represents an “international crisis.” During the aforementioned Regional Forum on Combatting Wildlife Trafficking, the United States served as the symposium’s co-host. While the relationship between the U.S. and ASEAN-WEN is an important factor in slowing the trade, China’s role as the region’s largest consumer of illegal wildlife products makes its inclusion in cooperative enforcement efforts vital.

China-U.S. Cooperation: The Future of Tackling the Illegal Wildlife Trade in Southeast Asia

ASEAN will not be able to combat the region’s illegal wildlife trade alone. With the majority of demand for wildlife and animal products coming from outside of the region, Southeast Asia’s wildlife trafficking problem fully includes China and thus requires Chinese cooperation in enforcement efforts. Joining CITES in 1981 shortly after its opening and reform, China’s cooperation in regulating the illegal wildlife trade is essential to reducing wildlife extraction in Southeast Asia as well as Africa. The International Fund for Animal Welfare praised China in 2014 for destroying six tons of ivory in an effort to discourage the trade and promoting several campaigns to dissuade Chinese citizens from buying items made with animal parts. The campaign photograph below utilizes a play on Chinese characters to grab the attention of Chinese consumers and decrease the demand for animal parts in luxury items.

IFAW_Campaign

Image Source: International Fund of Animal Welfare http://www.ifaw.org/united-states/news/new-year-china-comes-new-campaign

 

 

While little cooperative action has taken place thus far, the illegal wildlife trade represents an issue in Southeast Asia through which the U.S. and China can effectively cooperate. Often viewed as competitors in the region, U.S.-China collaboration on the issue of the illegal wildlife trade could slow the flow as well as provide a common goal towards which the U.S. and China could work. Though somewhat vague in its direction, the 2013 U.S.-China Strategic and Economic Dialogue generated conversation surrounding China-U.S. cooperation in combating the illegal wildlife trade worldwide. Both countries recognize that a thriving illicit wildlife trade bolsters organized crime and, therefore, severely threatens national security as well as legal economic enterprises. Jointly tackling the illegal wildlife trade could strengthen positive ties between the U.S. and China, particularly with regard to Southeast Asia.

Reducing Southeast Asia’s illegal wildlife trade not only enhances the region’s ecosystems, economic development, and regional security, but also unites national governments in the name of a common cause. Already the region has seen some progress: Vietnamese demand for rhino horn dropped by over 33% during 2014 after a series of public information campaigns disproving the effectiveness of its medicinal uses. Not only do these information campaigns seem to have been effective, but they also shows that the Vietnamese government responded to internal and external concerns regarding the country’s negative role in the global wildlife trafficking industry.

As other Southeast Asian countries as well as China continue in their efforts to regulate the wildlife trade within their own markets, international cooperation is vital in significantly reducing the trade and targeting the individuals responsible. With a large portion of illegal animal products coming into the region from Africa and then crossing multiple borders once arriving in the East Asia and Pacific region, controlling transit points in the region and developing effective law enforcement practices is key. Because animal products harvested and traded within Southeast Asia often end up China and the United States, the governments of the United States and China also have a responsibility to reduce demand and can work collaboratively to stop the supply.

The success of CITES strongly suggests that international cooperation and strict national enforcement are the keys to reducing the illegal wildlife trade. Yet, as demonstrated by the trade’s continued prevalence throughout the world, particularly in Southeast Asia, more work must be done. Cracking down on the illicit wildlife trade in Southeast Asia represents a significant cooperation opportunity for the U.S. and China, and taking this opportunity could bring positive results to relations between the two nations while also effectively reducing the illegal wildlife trade in Southeast Asia.

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Who’s afraid of China’s One Belt One Road Initiative?

A month ago China unveiled an action plan for China’s controversial One Belt, One Road initiative. The action plan introduces a series infrastructure development projects and trade related agreements along three Silk Roads emanating from China and reaching as far as Europe, Africa, and South America. It undoubtedly will be the subject of scrutiny as analysts and pundits on both sides of the Pacific chime in to make hasty comparisons to China’s 14th century maritime expansion and the more recent U.S. led Marshall Plan.  Some may even go as far to equate the One Belt, One Road to Japan’s pernicious WWII era East Asia Co-Prosperity Sphere – this analogy, to the Chinese, is ultimately insulting.

Scrutiny and false comparisons aside, China and the world will be made economically better off by a successful implementation of the One Road, One Belt initiative.  China estimates the total benefit stream for investors and firms that participate in the initiative to reach an astronomical USD 21 trillion. Moreover, the prospects of such benefits are particularly timely at a time when global aggregate demand is on a downslide.   During a series of fall 2013 visits to Asian neighbors, China’s president Xi Jinping first announced the One Road, One Belt proposal as an umbrella concept describing three economic belts extending westward from China toward Europe and Africa.  The three economic belts roughly follow historical trade routes linking China with the West and are known as the New Silk Road, South Silk Road, and the 21st Century Maritime Silk Road (See map).

One Belt One Road

According to the Chinese Foreign Ministry, the initiative seeks to strengthen economic collaboration, improve road connectivity, promote trade and investment, promote currency conversion, and bolster people-to-people exchanges.  The timing of the initiative is critical.  China’s current development trajectory requires an infusion of economic growth emanating from its under-developed interior using an outward focused plan to export its finished products abroad while importing much needed raw materials and foodstuffs from the rest of the world.

The catchword among the planners of the Belt and Road system is youwai zhinei (由外至内) or ‘to bring the outside in.’ This concept reveals the actual logic of the plan as an outward looking plan that fills domestic economic needs first. Xi Jinping is betting his political future, and by extension, the continued legitimacy of the Chinese Communist Party, on this plan to solve China’s economic woes and deliver successful reforms.  Thus, criticism should not pontificate on how the initiative is China’s grand strategy for global domination, but rather focus on assessing the efficiency of the various related project and prognosticating whether Xi can drive the initiative’s benefits home in time to stave off an economic slowdown.

To address current criticism, pundits are quick to draw historical comparisons to when Ming dynasty Admiral Zheng He, a court eunuch whose naval fleets, sailed as far as the east African coastline collecting tribute and expanding China’s sphere of influence.  To be sure, Zheng He’s ships were equipped with soldiers and were not simply diplomatic missions.  However, historian Jeremiah Jenne Executive Director of The Hutong in Beijing says, “Zheng was not trying to conquer or colonize in the name of the Ming Court. China gets into a lot of trouble in contemporary diplomacy because there seem to be elements in the foreign policy and military establishments and a whole swath of the general population who have trouble separating tributary arrangements from actual control and sovereignty.”

Jenne’s comments are generally made in reference to China’s historical claims to most of the South China Sea, many of which are based on Zheng He’s naval explorations.  However, on equal measure, Western detractors of the One Belt One Road plans should also not claim Zheng He as a world conqueror or challenger to the status quo.

Some analysts suggest the cheap financing and aid packages attached to the One Belt One Road plan are part of a political strategy for China to placate its neighbors over territorial disagreements with trade incentives and cash.  China indeed ill-advisedly attempted this strategy in the mid 1990s with its economic cooperation strategies vis-à-vis mainland Southeast Asia, but its track record with this strategy, particularly with Vietnam and Indonesia is spotty and has not produced desired results.

Yun Sun, resident fellow and Chinese foreign policy expert at the Stimson Center in Washington D.C. does not quite agree with the view that One Belt, One Road is motivated primarily by strategic and political calculations. She says, “The plan is primarily an economic campaign designed to serve China’s economic restructuring and export needs. It will benefit the region, as well as China.”  She admits the initiative will inevitably have a political impact and Beijing conceivably sees the political benefit as a part of the package.

“Using the counter-factual approach,” continues Sun, “China would still pursue One Belt, One Road without South China Sea disputes, so we can’t really say that the South China Seas or mending ties due to disputes there is the cause of China’s One Belt One Road.”

The post-WII Marshall plan which successfully lifted both the US and Europe out of its post-WWII economic woes and acted as the keystone to US led global restructuring models such as the Bretton Woods system indeed serves as a useful comparison to the One Belt, One Road initiative.   While we should be mindful that there is no guarantee the plan will deliver the local and global economic benefits that China hopes for, we should be more mindful that unlike the Marshall Plan, China has no economic restructuring model to offer the rest of the world, its stock of soft power is not necessarily improving, and this plan, still in its proposal stage, will be no easy sell.

To provide a comparison, China’s scorecard in regard to economic belt and road development in mainland Southeast Asia is murky and has contributed much to its current reputation rising regional power with unclear intentions.  Vietnam has stringently followed China’s export-led growth model and as a result is currently heading toward dire and inexorable economic straits unless it considers other alternatives.  Even in poor countries like Laos, where mid-to-high-value Chinese exports are not preferred to Thai or even Vietnamese products, scant evidence exists to demonstrate the “Made in China” image is improving.

The record of Chinese firms abroad in regard to environmental protection and labor practices is abysmal in countries like Laos, Myanmar, and Cambodia with no evidenced improvement in corporate social responsibility practices. Tied to this, Xi Jinping’s anti-corruption crackdown will reveal deep corruption and graft in many of China’s overseas infrastructure development projects.  Moreover, Xi Jinping is pledging to break-up the monopolies of many of China’s powerful state firms – construction and energy firms are already in his sights – thus, it is unclear who will build the One Belt, One Road projects.

To reiterate, these are the issues that deserve scrutiny and attention rather than the high-level rhetoric of China’s grand strategy.

Liu Jinxin, regional logistics expert and chief architect of the Bangladesh-China-India-Myanmar Corridor (a westward stretching leg of the South Silk Road – see map), says that the greatest challenge facing the One Belt, One Road strategy is in China’s public relations strategy.  “Too many out there misunderstand China’s intentions, and factions, particularly within democratic countries, will misinterpret the benefit flows that this plan will deliver.”  Liu also cites the need for harmonizing legal structures between cooperative partners in sectors related to trade, commerce, and logistics.  “China will learn the most from this process, specifically through interaction with countries in Europe where the rule of law is strong.  However, since China’s legal system is not based on rule of law, it will be difficult for China to emerge as a conversation leader on this initiative.  In many ways China’s role is passive.”

Thailand’s refusal to pass a regional cross-border transportation agreement sponsored by the Asian Development Bank (which China and other mainland Southeast Asian states have ratified) is reflective of Liu’s commentary.  The ratification of this agreement would require the break-up of many entrenched factions within Thailand’s customs and inspection agencies as well as the military – a move these powerful groups are unwilling to budge on despite Thailand’s overall enthusiasm for economic cooperation with China.

When applying a critical eye to the One Belt, One Road initiative, its best to begin with a consideration toward the feasibility of such a project and looking at China’s real capabilities. Many worthwhile questions arise amidst such an inquiry, and certainly no one should take for granted that China can pull such an endeavor.  The functionality of the initiative is to push China successfully through its next wave of economic reforms promising further stability to East Asia and delivering a substantial contribution to global economic growth.

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China’s Maritime Silk Road Gamble

Ever since Xi Jinping announced the creation of a Maritime Silk Road in an October 2013 speech to the Indonesian parliament, China’s vision for “one road” running through Southeast and South Asia has driven a significant portion of Chinese foreign policy in its periphery. This has led to both thecontroversial Asian Infrastructure Investment Bank (AIIB) (announced in the same speech) and complementary investment funds such as the Maritime Silk Road Bank, as well as high-level diplomatic visits by Chinese leaders to countries in the region. In addition, China sees its “Silk Road Economic Belt” among its Central Asian neighbors as indivisible from the “21st Century Maritime Silk Road,” as seen by China’s slogan 一带一路 (“one belt, one road”) and its public diplomacy effort to promote both policies together. All of this indicates that, like many Chinese foreign policy initiatives, the “21st Century Maritime Silk Road” is multi-pronged: it is intended to serve diplomatic, economic, and strategic purposes.

First and foremost, the Maritime Silk Road is designed to pacify neighboring countries threatened by China’s aggressive territorial claims in the South China Sea. Curiously, China has attempted to both aggravate tensions among its Southeast Asian neighbors and soothe them at the same time, contrary to its normal pattern of swinging back and forth between aggressive brinksmanship and diplomatic rapprochement (such as in China’s relationship with Taiwan or its cutting off and then reestablishing of military to military ties with the United States). Despite the idealistic claims of‘peaceful economic development absent political strings’ made by Chinese leaders and state media about the Maritime Silk Road, China has continued unabated to strengthen its unilateral claim to vast maritime territory in the South China Sea, turning reefs and other undersea maritime features into full-fledged islands, complete with airstrips that could be used by the People’s Liberation Army.

Conversely, the Maritime Silk Road is also designed to cement relationships with countries that are tacitly friendly to China such as Malaysia, Cambodia, Sri Lanka, and Pakistan. This will be accomplished primarily through economic incentives like infrastructure development and trade deals. In this sense, the Maritime Silk Road not only stands side by side with the Silk Road Economic Belt, but also as part of a historical continuum that includes China’s past investment in maritime-related infrastructure, which has been referred to by some as a “String of Pearls” policy. If one wants to know what kind of infrastructure projects China will fund in the future, look to what it has done in the past: oil and natural gas links to Myanmar’s port in Sittwe, ports in Sri Lanka such as the Hambantota and Colombo Port City projects, and the Pakistani port in Gwadar. Indeed, China and Malaysia have already announced a joint port project in Malacca. Meanwhile, China, which is already the largest trading partner for most countries in Southeast and South Asia, is also signing new free trade agreements with countries such as Sri Lanka.

Chinese infrastructure investment, intended primarily to strengthen China’s energy security and increase trade between China and its neighbors, will now get a huge boost with the creation of both the AIIB and more specialized investment vehicles such as the Maritime Silk Road Bank and the Silk Road Fund. While the AIIB has had the flashiest rollout with China contributing $50 billion USD to a planned $100 billion USD in capital, the other two funds are no slouches: the Silk Road Fund has plans for $40 billion USD in capital, while the Maritime Silk Road Bank hopes to attract$100 billion RMB in investment.

Finally, unmentioned in authoritative Chinese sources is that the Maritime Silk Road, and especially Chinese infrastructure investment, is implicitly intended to facilitate more frequent People’s Liberation Army Navy (PLAN) deployments in the Indian Ocean and beyond. The PLAN needs reliable logistics chains across Sea Lines of Communication (SLOCs) throughout Southeast and South Asia; ships cannot go far without a reliable supply of fuel, food, and armaments. But for the foreseeable future, China is at a serious disadvantage in this regard: the US Navy and allied navies have such a preponderance of force and ability to project power throughout the region that the PLAN is ill-equipped to compete. Given the PLANs current capabilities, China’s logistics capacity would only be dependable during peacetime; they would not survive in a contested environment, particularly if the US decided to close off key chokepoints like the Malacca and Sunda Straits. Therefore, the first step to strengthen the PLAN’s capabilities is to build reliable logistical infrastructure in key friendly states, such as the aforementioned projects in Malaysia, Sri Lanka, and Pakistan. These logistical links would still be quite vulnerable in a conflict scenario, given the tenuous relationship China would have with even putatively friendly countries if China went to war. Therefore, the primary benefit for the PLAN is to demonstrate presence in peacetime, and to show that it can operate far from its own shores.

The Maritime Silk Road, along with the attendant Silk Road Economic Belt, is truly a multi-headed dragon, so large that it is difficult to disaggregate its many parts. The most difficult challenge for China, however, will not be building infrastructure and signing trade deals—these are no doubt massive undertakings, but they are fundamentally instrumental tasks that will not receive much opposition from countries in the region. The more difficult objective for China is translating investment and trade into building a coalition of states in the region that align their values and foreign policy goals with those of China, and indeed identify with China at the expense of competitors like the US. China will likely find this kind of bandwagoning hard to pull off—when it comes down to it, the Maritime Silk Road may wash away like sand.

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Liu Weigao: The Developer Behind Qiu He’s Curtain

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Jiangsu businessman Liu Weigao at a meeting of the National People’s Congress in Beijing.

 

The following translation is a detailed exposé of Liu Weigao, the Suqian businessman whose exploits brought down Qiu He, the Vice-Party Secretary of Yunnan  Province.  The smartly crafted article written by Southern Weekend reporter Liu Jun was published on March 19 on the Phoenix News site.  The author is careful not to directly connect Qiu He to Liu Weigao, but the implications are extremely salient.  Moreover, the report links both Qiu and Liu to the deaths of two villagers.  After Qiu was placed under investigation on March 15, word passed quickly around Kunming that villagers died in the demolition of a village overseen by Qiu’s team.  A keen reader will note the usage of citations from the Kunming Daily that ridiculously support the work of the Kunming leadership demonstrating government control of the local media.

In Suqian, Liu Weigao went by the nickname “Half the City.” Others,  in private quarters, called him the “Godfather of Urban Construction.”

Li Xiong, a villager from Hongren village who protested his village’s demolition was severely beaten by three unidentified assailants one night while returning home.  At the local village department overseeing the demolition of Hongren village, an itemized account log reads: November 2010, hire people to take care of Li Xiong, spent 30000 RMB.  These notes were handwritten.  A line on May 16, 2010 shows “Purchased two wooden coffins, 1200 RMB.”

On March 17, 2015, Zhonghao (中豪) Commercial Group’s official Weixin account posted a notice saying its board chairman Liu Weigao (刘卫高) resigned from his position. Ever since the March 15 announcement of Vice-Provincial Party Secretary Qiu He’s (仇和)arrest, the media has been paying high attention to the name Liu Weigao.

Many signs of Liu’s demise appeared before the March 15 announcement.  Liu Weigao was a Jiangsu provincial representative to the National People’s Congress, but he was absent from this year’s recently concluded meetings in Beijing.  Many sources told to Southern Weekend reporter Xiu Lu that long before this year’s Spring Festival, Liu had already been taken away for official investigation.  Meanwhile in Suqian (宿迁), Jiangsu, many had noted that most of Liu’s real estate and investment projects had already come to a standstill.

Thirty years ago Liu Weigao got his start in Yiwu, Zhejiang.  He then slowly made the transition from northern Jiangsu to southwestern Kunming.  He started with a small company with registered capital of 5mn RMB (800,000 USD) which he then transformed into an empire of ten major firms valued at over 1bn RMB (150mn USD).  This empire went by the name of Zhonghao, and now Zhonghao will forever be associated with the name of a fallen official.

 

Designs for the X square kilometer New Luosiwan International Trade City

Designs for the 8 square kilometer New Luosiwan International Trade City

A Key Project

Among Zhonghao’s empire, the Zhonghao Luosiwan International Trade City (中豪螺蛳湾国际商贸城) is Liu Weigao’s magnum opus.  Luosiwan International trade city is a golden line of connected buildings stretching for hundreds of meters and is located 15 kilometers from downtown Kunming.  The locals prefer to call it Luosiwan (螺蛳湾).

New Luosiwan’s first and second phase buildings are five meters high with banners sporting the lofty slogans “Go Out into the World” and “Face the Future” hanging on its outer walls. Its entryways are cluttered by delivery companies and cargo trucks continuously drive in and out. Alongside of the complex are countless banks and hotels showing that “Asia’s top comprehensive commercial firm” (the slogan printed on Zhonghao’s stationery) was not built on the waves of a false reputation.

But this is only a small part of Luosiwan’s territory.  According to Liu Weigao’s plans, Luosiwan’s final size reached 12000 mu or more than 8 square kilometers.  It’s important to note that Kunming city’s area is only 98 square kilometers with Luosiwan accounting for 8% of that space

luosiwan

New Luosiwan’s main entrance

 

Five years ago, Luosiwan’s site was a barren farmer’s field located on the eastern banks of Dianchi, in Kunming’s outer reaches.  Now with more than 5.8bn RMB (935mn USD) invested around Luosiwan, it’s more like a new city in the midst of development.  Some praise Liu Weigao’s capabilities, but others look at him with disdain suggesting that without the government’s support behind him, he wouldn’t have such capabilities.

In 2008, Zhonghao entered Kunming amidst the frenzy of a major building phase where the new Kunming Party Secretary Qiu He called for the demolition and rebuilding of 300 urban villages.

In February 2008, a group of twenty-five businessmen from Yiwu, Zhejiang arrived in Kunming to survey commercial opportunities. This group was led by Liu Weigao.  In May of the same year the group decided to begin to replicate the Suqian model of economic development, and set Kunming in its sites as its priority testing ground.  Ground was broken on September 2008, and in April of the following year the roof was finished on the 1.2mn square meter marketplace which opened for business the following November.

“Within one year, an investment miracle happened in Kunming. Kunming’s investment efficiency is very high.” This is how Zhonghao’s board chairman, Liu Weigao appraised Kunming’s investment atmosphere at the May 9, 2009 annual meeting of Zhejiang investors.

This type of speed was not made possible without the “kind efforts” and support of the Kunming government.  According to a report in the Kunming Daily, to promote the development of Luosiwan International Investment City, the Kunming municipal government set up a leading small group to hold regular meetings to follow up on the progress of related projects and to assist with problem solving when the project came across difficulties and challenges.

A farmer tends his fields near the New Luosiwan site.

A farmer tends his fields near the New Luosiwan site.

For the three years after 2008, Zhonghao “attacked the city and seized territories” repeatedly grabbing extremely cheap land with extremely low effort. Public reports show on September 23, 2008, the Kunming municipal land bureau auctioned off seven parcels of state land totaling 877 mu (58 hectares) at a value of 780mn RMB (125mn USD).  Within five minutes the only bidder at the auction, incidentally from Zhonghao, purchased the land.  The construction of New Luosiwan’s first phase was secured.

A portion of this was farmland belonging to Hongren village.  Li Zhaorong, a villager from Hongren, recalled in a Southern Weekend report that at that time the government told villagers the use of the sold land was for public purposes.  The government did not mention the construction of Luosiwan.  At that time the standard for land compensation was 160,000 RMB  (25,800 USD) per mu, but in the end villagers in Hongren only received 60000 RMB per mu (9677 USD).

Zhu Xiaoyang, a professor from Peking University’s sociology department, conducted long term research on Hongren village and was a witness and participant in the resistance movement inside of Hongren.  She claims that at the time villager were compensated, surrounding land was valued at least 1.5mn RMB (241,000 USD) per mu.

When New Luosiwan opened for business, the old Luosiwan market in downtown Kunming announced its closing.  There was only one reason for closing –for the betterment of the New Luosiwan.  The official explanation was to “comprehensively direct vendors in their transition to the new Luosiwan.”  According to a Kunming Daily report, the Kunming Municipal government put on a special closing event for the Old Luosiwan market on November 17, 2009 two weeks before its official closing date.  At the event, the government head of Xishan district (where the old market was located) proclaimed the completion of the New Luosiwan Market.  He urged the vendors still operating at the old market to positively support and follow the directives of the Kunming municipal party and government organs.  He displayed confidence in the future of New Luosiwan.

But this only one side of reality, as many vendors resisted the forced relocation.  Yet their efforts had little effect.

Former Yunnan CCPCC Vice-chairman Yang Weijun remembers receiving the vendors’ petitions.  From the perspective of an old Kunminger, the demolition of the old Luosiwan market entirely was a mistake of the sitting municipal leadership.  “The old Luosiwan market had more than twenty years of history and received more than 200,000 customers per day.  It was the largest distribution center for everyday commodities in all of Yunnan and perhaps all of Southwest China.  How can you just shut a place down with business as good as that?  And then move 15 kilometers out into the suburbs?” he told Southern Weekend reporters.

The Hand Behind the Curtain

No outside protests were going to stop Liu Weigao’s New Luosiwan project. In fact, the deeper his steps, the larger the project grew.  In March 2010, a land sale’s sole bidder, again representing Zhonghao, grabbed four parcels of land for 1.07bn at 1.8mn RMB per mu (290,000 USD per mu) to be used in the Luosiwan’s second phase.  One year later at another land auction, the only bidder, also from Zhonghao, bought up twenty-seven parcels of land totaling for 6.4bn at 3.5mn RMB per mu (564,000 USD per mu). That auction lasted less than three minutes.

A Southern Weekend report revealed during the construction of New Luosiwan’s 2nd and 3rd phase, not all of the land was used to build the commercial space. A portion of the land was used to build private real estate.  For example, in the 3rd phase among the twenty-seven parcels of land purchased, only eight were used for commercial purposes.  Eleven were used for residential space.  Taking commercial land and illicitly converting it for residential purposes has been an unspoken rule of the real estate industry for years.  Zhonghao is known to exploit this rule to the extreme.

On Luosiwan’s grounds, Southern Weekend’s reporters observed that Zhonghao’s real estate projects occupy the periphery, and possibly in aggregate outsize Luosiwan’s commercial space.  In February, 2010 Liu Weigao established the Zhongwang(中望) real estate company with a registered capital of 250mn RMB (40mn USD) with Zhonghao as the majority shareholder.  Zhongwang’s first project was the 1500 mu (100 hectare) Zhongwang City (中望城) – across the street from New Lousiwan.

Zhongwang City’s first phase construction was unsurprisingly smooth. In August of 2014, Zhongwang purchased the largest parcel of land for sale that year at 1.79bn RMB (288mn USD).  The land is located in Yiliu subdistrict’s Wula village in Guandu District and was comprised of nine parcels of land totaling 569.47mu (38 hectares).  Because of this purchase Zhongwang was named Yunnan’s land king.  The auction was the same as previous years – only one bidder from Zhongwang was present.

Luosiwan 2007

Google satellite image of future New Luosiwan site, 2007. Tami, Wula, and Hongren villages occupy the periphery.

Luosiwan 2015

Google satellite image of New Luosiwan site, 2015. Only Hongren village remains near the upper left corner.

 

The land grabbed by Zhonghao has been done so entirely in the name of demolishing Kunming’s urban villages (城中村). A Kunming Daily report said it is out of step for a major commercial port of China to be surrounded by urban villages.  “This is an effective project for integrating the rural and urban areas and to improve residential environment and transportation.  It has great significance for improving the image of the city.”

But surveys conducted by Southern Weekend discovered that Tami village, Wula village, and Hongren village, all affected by the New Luosiwan project were in fact not zoned as “urban villages.”  They were only torn down after the Yiliu sub-district applied to the Guandu district government for demolition.

An internal document from Guandu District reads that on November 3, 2009 the Guandu office responsible for speeding up urban village demolition approved the request of Ailiu sub-district and agreed to proceed with the destruction of the three villages.

The Guandu district government has always been responsible for taking the lead on demolition related to the New Luosiwan project.  Zhonghao, from beginning to end, has never been at the front of the action.  Li Zhaorong says he’s never seen Zhonghao talk directly to the Guandu government, but in actuality Zhonghao has always been behind the curtain providing support.

According to many documents acquired by Southern Weekend, Zhonghao’s people have participated in the entirety of the planning related to demolition in Guandu district.  The minutes of meetings regarding demolition related to the New Luosiwan project show that Chen Hongbing, Wang Zaizhang, Xu Dingsheng, Chen Qianfei (陈红兵、王存章、徐定生、陈钱飞)were in attendance.  All four are upper management at Zhonghao.

In another internal document procured by Southern Weekend, eleven Zhonghao employees were listed on the roster of Hongren Village’s demolition team.  They were sent from Zhonghao’s finance, cartography, and office departments.

The demolition progress hit a snag when it reached Hongren village.  Among 1300 families that lived there, only sixty agreed to move.  Hongren village had just been built according to regulations related to the construction of China’s new socialist countryside program.  Those living there had only recently moved in, yet now their homes faced immediate demolition.  The villagers were not interested in an extra cent of compensation to coax them to pick up and move again.

The demolition of Hongren village was to be carried out by its own government office. On May 20, 2010 at 9:00am, forceful demolition of Hongren village was begun. Headed by the demolition team from Hongren village government – more than 500 chengguan, guards, and policemen were on hand.  Zhonghao had five employees on site to oversee maintenance and provide material support.  Amidst the chaos, one villager was blinded.  Li Zhaorong was one of the “Five heroes who resisted demolition” (抗拆五君子). He recalled to Southern Weekend reporters that one of the other “heroes” Li Xiong was beaten by three unidentified persons in the middle of the night.  Three others were sent to the local jail and not released until the next morning.

Southern Weekend also procured handwritten documentation from the Yiliu sub-district demolition command center, “November 2010, hired people to take care of Li Xiong’s, spent 30000 RMB.  On May 16 2010 a line showed “Purchased two wooden coffins, 1200 RMB.”

Not only did Zhonghao grab the homes of villagers. It also swallowed land previously purchased by other real estate developers.  Sources close to the situation have told Southern Weekend that it was industry owners and government officials who blew the whistle on Liu Weigao.

The Liberator’s Realm of Fortune

Many people are clear that the completion of New Luosiwan was a replication of Liu Weigao’s investment experience in Suqian, Suzhou. Looking back at Liu Weigao’s journey, Yiwu was where he got his start, but Suqian was his realm of fortune.

Media reports suggest that Liu Weigao is from Suqian’s Shuyang county, but there is no certainty to this information. Southern Weekend can report that Liu Weigao was born in Qingyanliu village in Zhejiang’s Yiwu City. Interestingly Qingyanliu Village is famously known as the “Number one village for online vendors” (网店第一村).

With only a high school education, Liu Weigao got his start selling socks.  After a ten year struggle, his Zhejiang Suli company registered in 2003 with an initial startup capital of 160mn RMB (25.8mn USD).  In that year, Zhejiang province stopped the approval of new industrial land and Liu’s sock industry faced the risk of losing his supply of capital.  This shock forced Liu Weigao to Suqian and ultimately is responsible for his rise.

This time was also a positive period for Suqian’s fortunes.  In 1996, Suqian was the poorest of Jiangsu’s thirteen cities.  That year Suqian’s leadership began to attract investment by promoting the city for economic development to outside investors.

Liu Weigao traveled from Yiwu to Suqian to conduct investment surveys two days after receiving an invitation from Suqian officials.  He decided to invest in the city’s economic development zone and expand his sock industry.  Three years after settling in Suqian, he began to search for other investment opportunities.

At that time Suqian was home to an old wholesale market established in 1997 with an area of 130,000 square meters.  Its market base was weak, product selection narrow, and was lacking in both customers and vendors.  Although the Suqian government provided numerous policies to promote commercial activity, in 2005, the market’s commercial sales were less than 500mn RMB (80mn USD).

Then Liu Weigao proposed to build a new market on the site of the old one, but this plan would restrict the scale of the market’s potential.  Later, the city government sold him a parcel of land in which Liu Weigao invested 2.6bn RMB (420mn USD) to build a brand new, bigger market.  This market was a direct copy of Yiwu’s successful small commodities market.  Liu Weigao was eager for the world to know of his new project.

Ground was broken on August 1, 2005 on the Suqian-Yiwu International Trade City (宿迁-义乌国际商贸城)more familiarly known as the Suqian Small Commodities City (宿迁小商品城).  Liu Weigao’s efforts were promoted with high praise from the Suqian government.  In June of that year, the Suqian Party headquarters held a meeting to promote the construction of Liu’s market.  The saying at the time was “Building a big market and opening big development will expand accumulation” and “Work hard to create a large market, strengthen the attraction of Suqian’s markets.”

In 2006 Suqian celebrated its tenth anniversary as a municipality.  Liu Weigao’s market was complete with a physical area of 1.46mn square meters.  In August 2006, China’s most popular television show “One Song”(同一首歌) came to Suqian.  At the Suqian taping Liu Weigao spent an estimated 8mn RMB (1.3mn USD), and because of this he shot to stardom gaining the reputation of the wealthiest businessman in Suqian.

From 2002 onward “Attracting financing and investment” was the top priority for economic development according to Suqian municipal government.  The taping of “One Song” was a perfect way to hit the government’s objectives.  After airing on China Central Television, Suqian’s image received a major boost.

One month after the taping, Liu Weigao was honored as a “Top Minister for City Construction” (建市十大功臣) at the municipality’s year-end meeting.

Liu Half-the-City

After “One Song” Liu Weigao’s reputation climbed to its zenith.  In January of 2007 Liu Weigao was elected head of the Suqian Chamber of Commerce in a landslide victory. He represented Suqian at the annual Jiangsu provincial meeting of top commercial investors.  There he proclaimed “When I chose to invest in Suqian, I fell in love with its openness and tolerance.”

Moreover, the license plate number, N00000, on his ostentatious Rolls Royce suggested that he did not simply enjoy a typical relationship with the local government.  He was the talk of the town.

From here, Liu Weigao’s investment in Suqian expanded.  He began to expand his scope of real estate investments and won contracts to build many government and public buildings.  He easily bought up parcels of land in Suqian’s most valuable downtown areas, particularly those close to Xihu Road (西湖路).  Here he built the giant Zhonghao International Market (中豪国际广场) and Zhonghao International Mall (中豪国际星城) and afterwards began construction on Phoenix City(凤凰美地), a giant real estate project, in addition to other projects.

After he invested in Kunming, Liu Weigao returned once again in 2010 to invest in Suqian.  This time his proposed project was even bigger: the 11 square kilometer Canal Cultural City – a mixed commercial residential site with a large exhibition center and more than twenty tourist sites.  It was known as China’s largest Grand Canal themed project.

On November 29, 2010, Suqian government leaders proclaimed “After construction the Canal Cultural City will be Suqian’s international calling card.”

In Suqian, Liu Weigao went by the nickname “Liu Half the City” (刘半城).  Others in private quarters called him the “Godfather of Urban Construction”(城建教父 ).

According to the report of an anonymous high-level Suqian official, Liu Weigao’s motivations for returning to Kunming were unclear, but one can assume his endeavors in Kunming had reached high levels of success.  Otherwise he would not have been able to make such an enormous investment in the Canal Cultural City.

When the Tree Falls, the Monkeys scatter

In August 2014, Zhonghao’s annual commercial income reached 35bn RMB (5.6bn  USD) ranking it as the top private firm in Yunnan province.  Zhonghao was also in preparation to list its holdings on the Hong Kong stock market.  But last October Kunming Municipal Land and Resources Bureau (国土局) issued a list of twenty-five firms which owed money on land deals.  One of those firms was Zhonghao.  It is critical to note that prior to this announcement, Kunming’s top leadership had been reshuffled in Xi Jinping’s anti-corruption drive.

Zhonghao was not prepared for days like this.  Vendors at New Luosiwan still held Liu Weigao with much contempt as a rude and arbitrary businessman.  One vendor recalled to a Southern Weekend reporter that originally vendors were required to pay five year’s rent up front, but now were required to put up six year’s rent.  Some vendors in the New Luosiwan’s first phase zone engaged in physical altercations with Zhonghao’s management because Zhonghao forced them to move to the recently opened third phase zone to improve the atmosphere.  They refused, saying, “With business this good, on what basis are they forcing us to move?”

Opposite from his Kunming experience, back in Suqian, Liu Weigao continued to rein in honors and political resources.  In 2013 he was selected as a Jiangsu Province representative to the Chinese National People Congress.  Liu was one of only six representatives from Suqian.

On October 1, 2013 Liu Weigao’s theme park, Canal Paradise (克拉嗨谷), opened on the grounds of the Grand Canal Cultural City.  With a total size of 450,000 square meters, it is known as northern Jiangsu’s largest theme park.  After an initial positive reception, the interest in the park has gradually lessened.  Tickets cost 150 RMB per person and many in Suqian remark that the park is too expensive.

Canal Park

Google satellite image of a portion of the Canal Cultural Park. Liu Weigao’s Canal theme park is center bottom with the Tianxi real estate developments bordering above.

 

In addition, most of the commercial space for rent at the park’s entrance is empty.  Those who do conduct business there are barely getting by.  A manager of a local restaurant told Southern Weekend reporters that rent for a 100 square meter space is 30000 RMB (4830 USD) per year.  But she has less than three or four customers per day with some days attracting no business at all.  A nearby shop posted a “for rent” sign on its doors only after doing two months of business.  To date, no one has responded to the offer.

Across from the Grand Canal Park, sits the Grand Canal Tianxi(天玺) real estate project.  Construction stopped here earlier this year.  Barren and grey, the half-finished buildings show off huge advertisements “Grand Canal City gives you a piece of blue sky and green pastures”  In addition another advertisement sports a promise unlikely to be kept, “Buy in the spring, and move in this fall.”

Only ten or so guards watch the empty construction site.  The doors and walls of the site are pasted with banners saying “Because of Grand Canal City’s major violations, the construction on this project terminated on February 1, 2015.”

Kunming’s New Luosiwan Market is equally quiet.  The deeper you walk into it, the more you discover it’s a ghost town.  Inside New Luosiwan’s second phase building, Southern Weekend reporters discovered that most of the stalls above the third floor are empty.  One of the stall owners said he’s losing money daily, not even making enough to pay rent.  The finished sections of phase three are even more barren.  Surrounding phase three are real estate projects as big as several football pitches.  Some have finished work while some are still under construction.  Very few people are moving in.

At the end of 2014, word on the Suqian’s streets was that Liu Weigao’s capital flow was on the rocks. A source close to the situation told Southern Weekend reporters that banks were tightening their debt structures and forced Liu Weigao to pay back a portion of his own debt.  They had no further loans to issue him as well.  Another source close to Liu Weigao told Southern Weekend reporters that at this time Liu Weigao’s capital was drying up.  Liu realized at meetings in both Kunming and Suqian that he was being treated differently and was caught weeping several times.

A reliable source also told Southern Weekend reporters that early in January 2015, Liu Weigao had been taken away for investigation by Zhejiang’s Commission on Discipline and Inspection.  At that time, Suqian municipal government began to find other firms to finish a portion of the construction projects previously started by Liu Weigao.

Another source told Southern Weekend reporters that in the last two years Liu Weigao’s capital flow began to dry up as Kunming’s pace of development slowed. Many of Liu Weigao’s cooperative partners defaulted on their debt payments.

In Zhonghao’s Suqian headquarters, an employee told a Southern Weekend reporter that Liu Weigao’s troubles will not affect the business of the company.  Everything is normal here at the company.  He said, “This company doesn’t solely belong to Liu Weigao, rather it belongs to its board. And there are many board members.”

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Qiu He, top Yunnan official, ousted for corrupt land deals

Qiu He

Qiu He, Former Vice Party Secretary of Yunnan Province Photo: GoKunming

The Ides of March did not bode well for Yunnan province’s most controversial official.  Qiu He, Yunnan’s Vice Party Secretary  is being investigated for alleged corruption by the government’s corruption watchdog agency for “serious violations of discipline and law”, a common euphemism for graft.

State media reported the opening of the Central Commission for Discipline Inspection (CCDI) investigation into Qiu on Sunday March, 15.

Qiu He was in Beijing at the time of the announcement, attending the yearly National People’s Congress there, along with the rest of the Party leadership from Yunnan.

He is the latest in a number of top Yunnan officials to have been nabbed for corruption in the past year. Following the investigation of former vice governor of the province, Shen Peiping, in March 2014, former Kunming Party Secretary Zhang Tianxin and former Yunnan Party Secretary Bai Enpei were all taken down for graft.

Before taking up the position of deputy Party secretary of Yunnan in 2011, Qiu He was the Party secretary of the provincial capital, Kunming, starting in late 2007.

A controversial city-builder 

Originally from Jiangsu province, Qiu was known as an anti-graft crusader and free market reformer. He began his meteoric rise in politics as the Party secretary of northern Jiangsu’s Suqian city, where he privatized local hospitals and schools and reformed the city’s infrastructure.

In Kunming, Qiu began his tenure by organizing a taskforce to ensure city officials arrived to work on time and limited their lunch breaks to thirty minutes.  Within a week of taking office in 2007 he instituted a policy linking local political futures of local officials to waste water pollution into the feeder rivers of Kunming’s Lake Dianchi, one of China’s most polluted bodies of water.   His passionate speeches on Yunnan’s development often highlighted the need to turn Yunnan from a backwater frontier province into a fast-developing regional hub.

He was the catalyst for a swath of controversial infrastructure projects in Kunming, including a new international airport finished in 2012 and an expansive subway system, still under construction and over budget.  The fog-stricken location of Kunming’s Changshui international airport, 40km outside of the city is a common source of frustration for Kunming’s citizens.  During the winter months, the airport will often close unexpectedly, stranding thousands of passengers and costing airlines millions.

Among Kunmingers, Qiu He is also known for demolishing a majority of Kunming’s 300-plus “urban villages” – poorly-constructed, low-income neighborhoods that dotted the city’s modern landscape. Many of these villages were replaced by housing developments built by businessmen from Jiangsu, Qiu He’s home province.  While Qiu He’s economic polices are often attributed to the skyrocketing rates of growth in Yunnan province (average 12% over last 5 years), now that China’s real estate market is cooling off, the Spring City’s blue skies are marred by dense and unsightly high-rise housing projects, many of which have completely stopped construction.  During Qiu He’s tenure, this pattern of unfettered real estate development was also copied in scenic and popular tourist regions such as Dali and Xishuangbanna, greatly decreasing their natural and cultural values.

 Attracting outside investment proves fatal 

While rumor and speculation are bound to follow the announcement of Qiu’s takedown, many cite deals made with his Jiangsu and Zhejiang business connections as reason for the investigation.

The New Luosiwan International Trade Center, with an area of more than 3 million square meters, is one of the world’s largest warehouse distribution centers and the final stop before Chinese-made goods are shipped onto destinations in Southeast Asia. It was built with an investment of more than 3 billion renminbi ($500 million) from Liu Weigao, a Jiangsu businessman most famous for establishing Yiwu’s China Commodity City, the world’s largest small commodities market, in Zhejiang province. Qiu He knows Liu, a National People’s Congress representative to Jiangsu’s Suqian city, from his time as Party secretary there. Once in Kunming, Qiu He recruited Liu to invest in New Luosiwan as part of his economic development policy. When the CCDI announced an investigation into Liu Weigao in February 2015, speculation circulated that Qiu He’s downfall was imminent.

According to one source at a local bank who wished to remain anonymous, Qiu’s demise was a popular topic of discussion at the office. Liu Weigao had millions in savings seized after he was investigated in February, along with a number of business loans associated with New Luosiwan that have yet to be paid back. The source and the source’s colleagues knew of Qiu He’s connection to Liu Weigao and openly speculated prior to Sunday whether Qiu would be investigated himself.

In fact, Qiu was scheduled to visit the bank’s local offices in downtown Kunming this week for an investigation of the bank’s performance. The source and colleagues spent the weekend at the office preparing for the Vice Party Secretary’s visit. However, the work appears to be all for naught, after Qiu did not come back from Beijing Sunday.

An even bigger target

Despite his controversial track record in Yunnan, Qiu He was known as an official who cared more about his promising political path rather than benefiting financially from his position. Qiu was an extremely cautious politician who is known only to have met with supplicants during office hours, and not in decadent KTV parlors or in exclusive social clubs.

Whereas 2014 saw a raft of top Yunnanese officials taken down for their connections to the disgraced Zhou Yongkang, Qiu He’s investigation appears unrelated. Instead it may mark a shift in focus from the Sichuan-based clique that formed under Zhou to an even bigger target.

Qiu He is associated with a political faction related to Li Yuanchao, current vice president of China. Li, the former Jiangsu Party Secretary from 2003 to 2007, is a major power broker in the province and likely oversaw Qiu He’s rise. Behind Li Yuanchao however, stands former President Jiang Zemin, who oversaw the country’s development in the 1990s. Jiang’s clique includes officials from Shanghai, Zhejiang and Jiangsu.

Qiu He could be the first top official from the Jiang clique to be taken down during Xi Jinping’s current anti-corruption campaign. Further fueling speculation of a crackdown on the Jiang clique, the Governor and Provincial Party Secretary of Jiangsu province were nowhere to be found at this year’s recently concluded “two sessions” (lianghui). Some analysts see current President Xi Jinping’s crackdown on corruption as serving the dual purpose of restoring the public’s confidence in the Party and eliminating Xi’s political rivals.

Many Kunmingers welcomed news of the downfall of former top Yunnanese officials Bai Enpai, Shen Peiping, and Zhang Tianxin with support and expressed satisfaction; however reactions to Qiu He’s ousting are mixed, particularly among investment groups from outside of Yunnan.  A source close to the situation remarked that many of Kunming’s Jiangsu businessmen left the city after hearing about Qiu’s investigation. His friends with connections to Qiu, many of whom are responsible for large chunks of Yunnan’s commerce, have all cancelled their cell phone subscriptions and are currently unreachable.  Their fears, understandably justified, lie in speculation that once Xi’s political rivals are eliminated, those businessmen connected to them will soon come under the gun.

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Filed under China, Current Events, Economic development, Governance, SLIDER, Yunnan Province